Australia has formally elevated its relationship with China to a notch below the United States, after Prime Minister
Julia Gillard
claimed a rare foreign policy victory by forging a “strategic partnership" with Beijing.

Ms Gillard, who has often been criticised for neglecting ties with Australia’s biggest trading partner, signed the agreement with Chinese Premier
Li Keqiang
on Tuesday.

It will lock in an annual meeting between the Australian Prime Minister and the Chinese Premier, along with meetings involving the Foreign Minister, Trade Minister and Treasurer.

In a speech prior to the official signing, Ms Gillard said the elevation of the relationship with China was “justified by the times".

“The relationship will be described as a strategic partnership to reflect the importance both countries place on it," she said in a separate statement.

Official launch of regular talks

After a ceremonial welcome including a marching band and military honour guard, Ms Gillard and Mr Li held a one-hour meeting. “This can be regarded as the official launch of our annual regular talks," Mr Li said.

China has strategic partnerships with Russia, Germany and Great Britain and a similar arrangement with the US.

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Australia’s deal with China has been nearly a decade in the making and was first raised in the final years of the Howard government.

At that time, Australia was concerned about the signal it would send to Japan and a lesser degree the US.

Australia again toyed with the idea after former prime minister
Kevin Rudd
came to power, but baulked after China’s violent crackdown on the Tibetan riots in 2008 and a tough approach to anti-Chinese sentiment during the Olympic torch relay.

“It’s about saying to China, we are not just in this for the money," said former diplomat
Richard Rigby
, director of the China Institute at the Australian National University. “It puts China right at the centre of a small number of major relationships that Australia has, including the United States."

Signature foreign policy achievement

Wang Zhenyu
, an associate research fellow at the China Institute of International Studies, said the deal would help Australia move into its “Asian Century" and would ensure stable development of the economic relationship.

He said it showed a “page had been turned" since the diplomatic fallout after the jailing in China of Rio Tinto iron ore executive
Stern Hu
.

The deal aims to elevate the strategic and political relationship to a level approaching economic ties, which have seen a tenfold increase in trade over the past decade.

But it will not involve an alternate set of meetings in Australia and China each year as part of the deal. Along with the leaders meeting, the Treasurer and Trade Minister will meet annually with the chairman of the National Development and Reform Commission, China’s top economic planning agency.

Australia’s Foreign Minister will also meet annually with his Chinese counterpart, who is China’s second-ranked official in this portfolio.

At present, a state councillor (cabinet member) with responsibility for foreign affairs is the top-ranked office in this area. This is thought to have been a sticking point during negotiations.

The strategic partnership is likely to be the signature foreign policy achievement of Ms Gillard’s prime ministership, which, if polls are correct, will end after September’s federal election.

Ms Gillard is known to have first raised the proposal during a meeting with former President Hu Jintao last April and in a phone call in March when Mr Li officially became Premier.

Executive director of the China Studies Centre at Sydney University, Kerry Brown, said if properly utilised and managed, the agreement should allow both sides to talk about contentious issues and achieve outcomes.